Crown Resorts chair and former Liberal senator Helen Coonan has another big week ahead of her — with a full day of hearings still set for the NSW casino inquiry on Tuesday and Crown’s virtual annual meeting on Thursday.
At the casino inquiry hearing on Friday, Coonan, an experienced lawyer and former federal minister, did her best to portray herself as someone very much concerned to improve the corporate governance controls at Crown since taking over as chair in January after John Alexander stepped down from the role.
But whether it will be enough to convince the inquiry, headed by former NSW Supreme Court judge Patricia Bergin SC, to approve Crown’s suitability to hold a casino licence in NSW is far from clear.
Bergin’s comments that Coonan’s plans for next Tuesday, which had included attending several Crown committee meetings ahead of Thursday’s annual meeting, might be better scheduled for “after sunset” show that Coonan has another big day ahead in the virtual witness box.
If past practice is any guide, once counsel assisting Naomi Sharp has finished her questions, Bergin will finish the examination by asking some probing questions from the bench.
At the least, Bergin looks set to deliver a report that will be critical of the processes within Crown, recommending several areas for improvement.
But from comments made this week, Bergin is questioning whether Crown can open its Barangaroo casino in December as planned, with the inquiry hinting strongly that it might be better to wait until it has delivered its report by February.
The problem for Crown is that the Christmas holiday period is a good time to be open and for gaining momentum in time for the important Chinese New Year in mid-February.
The past few months of the inquiry have been gruelling for Crown as director after director have revealed a lack of adverse information going up to the board, a lack of knowledge about what was going on at the grass roots of the company particularly in a highly sensitive area like China), and raised questions about their independence from controlling shareholder James Packer.
While Coonan has brought forward a very different face of corporate governance to Crown, one far more attuned to the concerns being raised at the inquiry, the company is not out of the woods by any means yet when it comes to its holding of a casino licence in NSW, despite changes already made and mooted to be made to directorships and internal processes, including significantly strengthening its internal controls and reporting lines around money-laundering.
Coonan arrived at the inquiry ready to outline in some detail her plans for change at Crown now that it is under her leadership and managed to announce some of them to the inquiry.
Senior Crown executive Barry Felstead, who has headed up Crown’s Australian resorts since August 2013, will be leaving at the end of the year.
Coonan is overseeing a review of the board that could result in sweeping changes and a fresh set of independent directors.
She has also suspended Crown’s dealing with junket operators — who bring in high-rolling VIP gamblers from overseas to its casinos — until next June (allowing it to take into account the inquiry’s recommendations), is reviewing the details of Crown’s agreements regarding disclosure of information to Packer, and has plans for a new head of anti-money-laundering who will report directly to the board separate from the company’s day-to-day operations.
But while Coonan, a Crown director since December 2011, admitted that there were shortcomings within Crown, she was not prepared to admit — as was put to her on Friday — that Crown had a culture of arrogance.
She also made it clear she had a high respect for director Michael Johnston, one of the Packer representatives on the Crown board who has admitted that he did not tell the full board of some key issues regarding dangers to Crown staff in China, although she will ask him to shed some of his other responsibilities if he is to remain as a director.
Coonan may be prepared to admit Crown has had its failings, but she insisted that it still had a “robust” process for checking out the suitability of junket operators it dealt with (one of the key areas of concern for the inquiry) and that the company was entitled to defend itself through a newspaper advertisement last year from what it saw as a “ferocious attack” by the press last year.
She admitted that the Crown board had deliberately not instigated its own inquiry into the events leading up to the arrest of 19 of its staff in China in October 2016 because of legal advice, as it was facing a class action against it.
When Bergin suggested that it still could have been a good idea for the Crown board to investigate for its own reasons the issues behind the arrests, Coonan insisted that it had taken the decision not to on legal advice.
In short, while Coonan is a new face as Crown chair and is bringing a new corporate governance broom to its internal organisation, she is also a long-standing director who is not going to support any wholesale attack on its past operations.
Tuesday should provide Crown shareholders with greater insight into how harsh the inquiry’s verdict may be on Crown’s ability to hold a licence in NSW.
If Friday’s hearing is any guide, it appears as if the inquiry will be looking for some more change at Crown than what has been outlined so far.
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